Supply chain finance (SCF) is a term describing a set of technology-based solutions that aim to lower financing costs and improve business efficiency for buyers and sellers linked in a sales transaction.
Supply chain finance (SCF) is a term describing a set of technology-based solutions that aim to lower financing costs and improve business efficiency for buyers and sellers linked in a sales transaction. The supplier receives a discounted portion of cash in advance of the actual payment of goods by the buyer.SCF methodologies work by automating transactions and tracking invoice approval and settlement processes, from initiation to completion.
Supply chain finance works best when the buyer has a better credit rating than the seller, and can consequently source capital from a bank or other financial provider at a lower cost. While suppliers gain quicker access to money they are owed, buyers get more time to pay off their balances. On either side of the equation, the parties can use the cash on hand for other projects to keep their respective operations running smoothy.
